Ofcom's idea that people should be automatically compensated following a loss or reduction of their broadband service has been criticised.

According to Vodafone, the watchdog is wrong to assume that automatic compensation would "further incentivise service providers to improve service quality", ISPreview reports.

Indeed, the provider argued that the cost of implementing the measure could lead to broadband companies having to "sacrifice service quality in order to invest in compliance measures".

"Further, excessive cost of implementation/identifying root cause of each fault would lead to price rises to ultimately fund the costs of compliance," Vodafone said.

"Leaving quality of service to market forces in a competitive mobile environment both permits innovation to improve services and drives down prices."

SSE was equally critical, saying it is "totally unacceptable" to design a compensation system for network and wholesale issues that does "not directly entail network and wholesale communications providers having to pay out the principal compensation amounts".

This suggests that the industry could lobby for BT's infrastructure subsidiary Openreach and other operators of underlying infrastructure to pay out in the event of a loss of service.

The ISPA added Ofcom's proposal could work as long as any compensation paid out is "within reason".

"If ISPs are forced to pay large amounts of compensation, they will need to make up for the financial shortfall elsewhere, with the likely result higher prices for consumers," it stated.

"We would suggest that there should be a cap on any compensation that can be awarded, similar to the cap offered in the event of an electricity power cut."

The ISPA added that increased competition within the UK over the last decade has "improved consumer choice and reduced prices, resulting in very low broadband prices, some of the lowest throughout Europe".

uSwitch Limited is authorised and regulated by the Financial Conduct Authority (FCA) under firm reference number 312850. You can check this on the Financial Services Register by visiting the FCA website.